Gold prices eased on Monday following U.S. President Donald Trump‘s announcement of a July 9 deadline for a trade agreement with the European Union, retracting his previous threat of a 50 percent tariff effective June 1. In Dubai, gold price saw an increase of AED8.75, with 24-carat gold priced at AED404.75, and 22-carat gold rising to AED374.75. Furthermore, 21-carat gold climbed to AED359.25, while 18-carat gold reached AED308.
On a global scale, spot gold decreased by 0.3 percent, settling at $3,346.59 an ounce as of 03:12 GMT (currently above $3,348). U.S. gold futures dropped 0.6 percent to $3,345.70 (currently above $3,375).
Bullish trends
Vijay Valecha, chief investment officer, Century Financial, remarked to Economy Middle East, “The yellow metal ended last week with a gain of almost 5 percent amidst Trump’s threats to impose 50 percent tariffs on goods from the European Union from June 1 and 25 percent on Apple Inc., if it does not manufacture iPhones in the U.S.Â
He noted that, “Demand was further influenced by escalating concerns regarding America’s fiscal deficit, with the tax cut bill exacerbating the deficit and the associated Moody’s credit rating downgrade. These factors have fueled a risk-on sentiment, leading the bullion to surge by almost 27 percent this year. Additional factors contributing to the support of gold include ETF inflows and ongoing geopolitical tensions in the Middle East. Central banks worldwide have been increasing their gold reserves by over 1,000 metric tons annually for the past three years, nearly double the last decade’s average.”Â
“Technically, on the daily chart, a bullish engulfing candlestick was formed in the previous session, closing at $3356, indicating strong continued demand for the asset. In today’s session, gold slipped by 0.66 percent to $ 3,335 as Trump eased his tariff stance on the European Union by delaying the tariffs until July 9 to allow both sides to negotiate a deal. Nonetheless, it still continues to trade above the 9 and 21 SMA levels at  $3270 and $3290, respectively. It also faces resistance at $3,366, breaking which it can resume its upward trend towards the psychological level of $3400.”
During the 4-hour timeframe, gold has taken support at the ascending trendline, connecting the lows of $3120, $3236, and $3305. This shows that the upward trend still holds, with $3280 being a strong and critical support level to watch closely. The ATR of 75  indicates the metal may move in the $3357 – $3282 range,” Valecha highlighted.
Market relief
“There is (a) kind of element of relief in the marketplace after (the) pause on tariffs on the EU and we’re seeing gold weaken,” reported Reuters, citing Kyle Rodda, a financial market analyst at Capital.com.
Nonetheless, the overall trend remains favorable for gold due to actions taken by the United States, which are affecting them as well and could negatively impact the dollar and U.S. assets. He added that most central banks are shifting away from the dollar towards gold.
On Sunday, Trump retracted his threat to expedite 50 percent tariffs on imports from the European Union, agreeing to postpone his deadline for trade negotiations until July 9 after the head of the EU executive body stated that the bloc required additional time to “reach a good deal.”
Read more: Dubai 24-carat gold prices steady, global rates set for best week in over a month
Gold prices reach two-week high
Gold prices surged more than 2 percent to a two-week high on Friday, boosted by safe-haven inflows after Trump proposed 50 percent tariffs on European Union imports starting June 1 and indicated he was contemplating a 25 percent tariff on any Apple iPhones manufactured outside the United States.
Meanwhile, the dollar index fell to its lowest level in nearly a month against its rivals. A weaker dollar renders greenback-priced gold more affordable for holders of other currencies.
The SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, reported that its holdings decreased by 0.15 percent to 922.46 tons on Friday, down from 923.89 tons on Thursday.
Spot silver remained steady at $33.46 an ounce, platinum dipped 0.2 percent to $1,093, and palladium increased by 0.7 percent to $999.90.
